ATLANTA - Three years ago, Michael Amos of Ball Ground, Ga. read an ad in Navy Times promoting a way for veterans to get cash advances on their retirements.

Amos, a master gunnery sergeant who retired in 1992 after 20 years in the Marines, earned a pension of $1,492 a month. He was moving his family to Georgia from Tennessee and needed money right away for a down payment on a home.

In April 2001, he signed an agreement to receive $42,500 in exchange for eight years of his military pension. After $4,379.50 in fees and life insurance were deducted, he received $38,120.50.

But over the life of the contract, Amos would have to repay $143,284 for that $38,120.50, including $105,164 in finance charges.

Those numbers represent an annual percentage rate of 45 percent, according to a lawsuit that Amos and two other military veterans filed Tuesday. The lawsuit accuses two financial companies of swindling veterans out of their pensions and benefits in "advance funding" scams.

"The targeting and victimization of men and women in uniform is one of the most reprehensible acts anyone could commit," said former Georgia Gov. Roy Barnes, one of the attorneys in the case.

"During a time when we should support our troops, those who would single veterans out, charge them 40 percent to 50 percent interest and deprive them of their military pensions should be dealt with to the fullest extent of the law," Barnes said Tuesday.

Amos is the lead plaintiff in the lawsuit, filed in U.S. District Court in Atlanta. He was unavailable for comment Tuesday because of a family illness, Barnes said.

"This is nothing but a subterfuge for a loan," Barnes said. "There were no truth-in-lending disclosures at all."

The lawsuit seeks class-action status and a court order against Advanced Funding Inc. of Glen Burnie, Md., and C&A Financial Programs Inc. of Stuart, Fla. The companies, which advertise in national military publications, try to give potential customers the impression they are endorsed by the armed forces, the lawsuit said.

The plaintiffs are seeking a federal court order prohibiting the financial companies from continuing a "deceptive scheme" of high-interest loans to retired and disabled veterans without providing cost-of-credit information. The lawsuit seeks unspecified damages and attorneys fees under the federal Truth in Lending Act.

Leif Grazi, a lawyer for C&A Financial, said the company has done nothing illegal. "The contracts clearly state it's not a loan," he said.

C&A Financial has lawsuits pending in Florida state courts against Amos and another plaintiff, Michael Elliott of Hoover, Ala., for not paying off their contracts, Grazi said. He said Elliott filed a counterclaim against C&A and that his bid for class-action status was withdrawn.

One of the lawyers representing the plaintiffs in the federal lawsuit, Lynn Drysdale of Jacksonville Area Legal Aid in Florida, said she is trying to get Amos' case moved to courts in Georgia.

Drysdale cited a "disturbing growth in the number of unfair and deceptive businesses lined up outside the bases, and we see their flag-draped ads on the Internet."

"Pension loans are the latest in a widespread and dishonorable practice of disguising loans as other products to hide their true costs from the military," she said.

The lawsuit contains allegations similar to those lodged against payday loan companies. The short-term loans, usually for $500 or less, carry "fees" of as much as $25 per $100. The practice has grown around Georgia military bases.

Earlier this year, the Georgia Legislature toughened penalties against already illegal payday loan companies. In August, Barnes, representing a number of plaintiffs, filed seven lawsuits against 135 lenders for allegedly continuing to make such loans in spite of the new state law.

In the federal lawsuit filed Tuesday, the other plaintiffs are Deborah Birdsall, a disabled U.S. Navy veteran from Edgemont, S.D., and Elliott, a former technician for guided-missile launching systems and missile maintenance who served more than 20 years in the Navy.

The three plaintiffs also are represented by the National Consumer Law Center in Boston. On behalf of its clients, the center has supported federal legislation introduced by Sens. John McCain (R-Ariz.) and Bill Nelson (D-Fla.) to increase penalties against illegal advance-funding schemes. The legislation was approved in the Senate last year but stalled in the House.